Game's Economy
Economy overview Nowadays, in the real world appeared a virtual economy - an emergent economy existing in a virtual persistent world, usually exchanging virtual goods in the context of the Massively Multiplayer Online Role Playing Games. The real value of the virtual economy is counted between $3 and $5 billion. In comparison the world coffee market has a value of $70 billion. People enter these virtual economies for recreation and entertainment rather than necessity, which means that virtual economies lack the aspects of a real economy that are not considered to be "fun" (for instance, players' characters in a virtual economy often do not need to buy food in order to survive and usually do not have any biological needs at all). As in the real world, actions by players can destabilize the economy. Gold farming creates currency within the game more rapidly than usual, exacerbating inflation. In extreme cases, a cracker may be able to exploit the system and create a large amount of money. This could result in hyperinflation. In real world entire institutions are devoted to maintaining desired level of inflation. This difficult task is a serious issue for the in-game economy that often have to cope with mudflation. Mudflation occurs when future additions to (or even just continued operation of) a game causes previously acquired resources to decline in value. This can take many forms and have many causes, including new items introduced by an expansion pack, fundamental imbalances in the in-game economy. Economy basic rules The main economic factor used in the game is supply and demand. This can be controlled by the game developers by: * decreasing supply - basically means to decrease the drop or the success rates * increasing demand - basically means to make players to buy and consume more stuff or to bring constantly new players in the game * setting a global rate for anything - basically means the most players do an activity, the best chances for success they have The in-game economy is based also on the notions of Perfect Market Competition, the ideal conditions for economic behavior, but it not follow them entirely. The question is if it would be possible to design an in-game economy that has prefect competition? Even it should be easy for the game's developers to design it, because they control anything related to the game systems, the answer is no. Under prefect competition all players are price takers. There are no opportunities for arbitrage, collusion, cornering the market, predatory pricing, dumping and all those other fun robber baron business activities. The economy balance Even the economy rules are well designed and implemented in the game and easy to control by the developers, there is a critical factor that can entirely ruin a game and the game-play experience: the economy balance. The balance is controlled by two mechanisms: * income mechanism - how much currency enter in the game's economy * outcome mechanism - how the existing in-game currency is consumed and taken out from the market The result should be a careful equilibrium: the amount of in-game currency rises and falls slowly in response to players activities rather than wildly fluctuating, which always disrupts the game experience. '''The deflation''' The deflation decreases the value of specific items: the prices become very low, not simply because there are many of such items in existence (too high drop rate), but because players are more willing to gather and place them on the market at a higher rate than players are buying and consuming them from the market. So the deflation does not come from a glut in supply, but rather from a glut in suppliers. The best example is the deflation in the value of the 8th discipline's relic book and skills: even the drop rate was not changed, many players doing Class Raid event made these items to be gathered at higher rate than consumed. In the same time, the 3rd skill book of the 6th discipline didn't face a deflation, because much less players were doing Monks event. The deflation was only because the majority of players enjoy Raid event more than Monks event. '''The inflation''' Also called "the long death of games", inflation appears when the in-game economy has not (or not anymore) the proper mechanisms to prevent or attempt to slow down the accumulation of excess currency. The amount of currency flowing into the game far exceeds the amount of currency being drained out of the economy. Slowly but surely, the main currency - the gold - becomes worth less and less and only sellers rule the economy by controlling the prices. The already unbalanced game economy was simply ruined last year because of a critical bug that allowed players to gain for free a big amount of gold and tokens. Both in-game currencies became hyper-inflated as a huge amount of tokens and gold entered the market through the bug, which led to a exponential increase of prices (and a exponential decrease of the value of the currency) every hour. In the game, rare and high valuable items like White Camels and level 7 gems became commonplace. Players even began to sell to their friends bugged pet eggs to allow them to get the bug too. The only solution to stop the economy disaster was to roll-back the server. The main cause for this unbalanced in-game economy is the lack of a centralized gold market: you have to look at each player's stall or shop to see what they're selling and what price they're charging if you want to know what something is worth. If you want to sell something, you have to peddle or open a shop in business and hope that someone interested in that particular thing happens to look in your stall. With several hundred players on at any given time, the odds of having your stall looked at are absurdly low. Thus, even if you are selling an item at a competitive rate, it may never actually sell because no one might happen to look at your stall. This breaks the main supply and demand economic rule: buyers have no power to influence the price of items. Their only actions are to buy or not to buy, and not-buying does not indicate a desire to buy at a lower price any more than it indicates a desire not to buy at all. Prices are purely supply-driven. As a result, buyers either suffer unfairly high prices or the market stagnates and transactions fail to go through. The Public Channel communication is not the solution to replace a well-designed gold market. Buyers want to pay the lowest price possible, but must offer a higher price than other buyers in order to make a successful transaction (otherwise the transaction will go to a higher bid). Likewise, sellers want to get the highest price possible, but must offer a lower price than other sellers. It's impossible to conduct a transaction by economic rules using a chat channel. On the other hand, the centralized Token Market works perfectly and drains the players Tokens and this is good for the economy balance. It is almost a dual market - supply and demand driven - like in the real economy. Where both buyers and sellers compete within the same marketplace, any entrant to the market can see both the upper and lower bounds for transactions within that market. However, most players don't want to compete in the market: they just want to make their fair transaction and get on with the game. Another weakness in the game's economy is the lack of the option to exchange gold for tokens. '''Conclusion:''' * players have not the proper tools they need to be active participants in the game's economy * the in-game economy works in different ways for different types of players (token users, non-token users, casual players, hardcore players) and this dramatically unbalances the in-game economy and the game itself * the economy is neglected and left to stagnate and die at the hands of gold inflation, which is entirely the fault of poor game's economic design, lack of support and maintenance * finally, the developers forgot that they're making a game. They're doing a business now * the company HQ and officials have no idea about the in-game systems and what is going on with the game's economy. They want to introduce constantly new Token items to drain the players real money, while the biggest problem in the game is to drain the players gold, to stop the inflation or even the hyperinflation In-game currencies In-game currencies are: * Gold * Ivory (bound gold) * Token * Bound Token The Gold have lost own importance as currency in the game in the moment when Token and Token Shop have been released. In that moment the game turned from a "Free to Pay" into a kind of "Free to Pay – Charge for Stuff" one. Many experienced players left the game in that moment and the game's economy was deeply affected. Gold became a harvested resource, gathered by doing specific activities in the game. The value of gold is the same as the value of any other item: it's derived from the opportunity cost in time to acquire it and this is not healthy for the game's economy. Selling items *Items attributes **Bound items (Bind on pick-up / Bind on equip / Bound gems by removing) **Token Trade marked items **Valuable marked items - Trusted Partners **Under level 60 protection **Common items **Pets - valuable / too high level *List of protected items **lvl35 class Relic Books **arrows and horns **normal version of pet skills **common identification spells Direct trade Peddle items Token market *In cities *In token market Business area shops Guild-based trading How to avoid scam